The following are some of the privileges of a private limited company as against a public limited company:
- A private company can be formed by only two members whereas seven people are needed to form a public company.
- There is no need to issue a prospectus as the public is not invited to subscribe to the shares of a private company.
- Allotment of shares can be done without receiving the minimum subscription.
- A private company can start a business as soon as it receives the certificate of incorporation. The public company, on the other hand, has to wait for the receipt of the certificate of commencement before it can start a business.
- A private company needs to have only two directors as against the minimum of three directors in the case of a public company.
- A private company is not required to keep an index of members while the same is necessary in the case of a public company.
- There is no restriction on the number of loans to directors in a private company. Therefore, there is no need to take permission from the government for granting the same, as is required in the case of a public company.
